Incentivizing managers to take risks and embrace innovation


\nIn her "Practical Innovation" column for, Elana Varon explains why IT departments often have such a hard time coming up with new innovations. On the one hand, the IT department is expected to help run the organization in a smooth, consistent manner and to automate what is already being done by the organization; on the other hand, the IT department is also expected to come up with new, game-changing innovations by taking risks. Given the choice between the two (safety and risk), is it any wonder that they often choose the relative safety of business as usual?


As Elana explains, IT workers must be given the incentive to tap into their own creativity, possibly by the creation of new innovation metrics that will reward them appropriately for taking risks:

"I disagree that "most IT people" have been trained to be, or define\nthemselves to be, idea killers (My loved ones include "IT people" who\nare among the most creative, innovative people I know). But the comment\nis right on about the need to accept more risk into your life. For\nexample, I think there’s frequently tension between the development\norganization that is building something new and cool and the operations\ngroup that has to integrate said new and cool thing into the\napplication stack. The guys who have to keep the lights on need to be\npretty risk averse. I'm not saying that’s a bad thing because that SAP\nsystem has to keep humming. But the conflict is there, and it's not\nyour classic alignment problem. It doesn't matter how much the CEO\nsupports innovation, the core infrastructre and apps have to run\nreliably. So senior management has to resolve the tension and define\nwhen and how risk –and failure-- is acceptable. [...]


How do you develop managers within your IT organization who are comfortable with risk? Well,\nhow do you get anyone to do anything? Set goals. Measure progress.\nFollow through. Unfortunately, a lot of companies don't do any of these\nthings... I’ll bet that if the CIO’s performance on\ninnovation isn’t being measured and rewarded, he isn’t measuring the\nperformance of his IT organization on that score, either."

[image: The Powerpoint Carrot and Stick]


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